Category: Money

Vector subscription business model concept in flat style – pricing plan for app or website service

A few weeks ago I started an adulting series called RWA (Reading, Writing, Arithmetic). The first post focused on Writing using a technique called Bullet Journaling. Today’s post is the second in that series, focused on Arithmetic and Subscriptions.

Subscriptions are those things you sign up and are automatically billed for each month. You don’t even have to think about renewing the service because the company automatically does it for you (by way of an invoice or more frequently an automatic payment from your bank account or credit card). Items that fit this category are: Spotify (music), Netflix (movies), Audible (books), iCloud Storage and the recently popular subscription boxes (wine clubs, book of the month, beauty products). Just about every company has a Subscription model these days and why not, it’s easy cash for them!

The subscription model is a booming field. In recent years, this market has grown by more than 100% a year, increasing from $57 million in sales in 2011 to $2.6 billion in 2016. This is from a recent article in Stanford Business Journal that also predicts that, “Everything you purchase — from transportation to entertainment to groceries — will soon come with a monthly plan.”

Sure, the costs are nominal; but, this discussion is not about being able to afford the service or not. I’m sure most people reading this could sign up for 10 or more of these monthly services and still be ok financially. I say JustSayNo because once you get sucked in, it’s hard to get out. Gym membership anyone? 🏋🏽‍♀️🏋🏽‍♀️🏋🏽‍♀️

Do you remember that infomercial from back in the day about a popular cooking device that had the popular slogan, “Set it and Forget It.” That’s EXACTLY how I think about subscriptions. Often times we sign up for products/services and either use it VERY SPARINGLY or completely forget about it altogether!

When it comes to expenses, they can of course be need vs want; but, the actual payments themselves can also be PUSH vs PULL. When expenses are PUSHED, you consciously send your money somewhere for something you decide you want. For example, I saw Michelle Obama on the Today Show and decided I would like to read her new book, Becoming. As are result of that conscious decision, I purchased her book. Under this scenario, I have just given my money to someone for a product I chose. Conversely, when expenses are PULLED youunconsciously send money to someone for something you may or may not want to experience/enjoy or chose. Sure, the monthly charge appears small (i.e. $9.99/month for Spotify); but, the real question is are you using the service and getting value from it or do you keep it around as a nice-to-have or because of a “just-in-case” philosophy. As in, just in case there’s a new movie, book or album I want to partake in this month…

For needs (rent/mortgage, long term disability insurance, student loans, car insurance), I’m completely ok with the PULL technique – it saves me time and energy on things I know I have to pay anyway; however, when it comes to wants (entertainment, luxuries) I prefer to PUSH at intervals I consciously choose.

Didn’t there used to be a time when people wanted to decide where their money went and for what? Now, we’re ok letting complete strangers decide for us?? 🤔 Are they smarter or more in tune with our actual needs, wants and desires than we are? A popular finance blog, MoneyCrashers lists the cons of popular product-based subscription boxes this way:

Overbuying – While a subscription box usually costs less than buying all the items in it separately, there’s a good chance you wouldn’t buy all those items if they didn’t come in your box.

Unclear value – You get a different assortment of products every month, and you don’t even know what they’re going to be.

Problems With Returns – Sometimes companies won’t return/exchange items you don’t use. Most often people just don’t bother.

Difficulty of Quitting – As long as the fee is low enough to make it seem like a good deal, it won’t seem worthwhile to cancel the service.

There is a such thing as a subscription hoarder. According to GQ magazine, people spend more than twice as much on subscriptions as they think they do. The average initial estimate was $79.74 per month. The actual average was a whopping $237.33 per month. When companies uncouple your payment from your enjoyment of their product, it’s easy to forget you ever paid.

I currently have one monthly subscription- Netflix – and that’s because we actually use it. On everything else, I consciously choose to pass. Don’t get me wrong, all subscriptions are not bad; however, the adulting tip of the day in this RWA series is that when it comes to subscriptions, choose wisely!!!

The strategy I will explain below only works if Nordstrom and Bloomingdale’s have the exact same product available at time of purchase (includes sizes, colors, etc.).

Here’s how it works:

Find an item you want to purchase (DUH!).

Add the item to your cart on Bloomingdale’s website and apply the promotion code to be sure it’s applicable.

Purchase the item from Nordstrom online and note your order #.

Call Nordstrom customer service, give them your order # and ask for a price match. Tell them the competitor and promotion code you used.

The customer service rep will confirm the promotion on the competitor’s website.

Your order total will be adjusted/reduced.

Wait for your credit to appear on your statement (usually 2-3 business days).

So what does this mean? When it’s Friends & Family at Bloomingdale’s or Macy’s or Lord & Taylor or Dillard’s, it’s also Friends & Family at Nordstrom! Use this approach with ALL competitors, large and small! #shoppingqueen #winning #thatisall

This morning I read an interesting article from Seth Godin’s blog. The subject, though not expressed in this way, is essentially was price vs. cost. Price as in the monetary commitment required to buy-in and cost as in the resources expended over time to maintain said item. Sure, it’s not a revolutionary concept; but, it can always be helpful to reflect on concepts in a different light or hear someone else’s perspective. The same thing is supposed to happen when you read scripture, right? 🤔

Here is Seth’s thought-provoking question: I know what the price tag says. But what does it cost?

Don’t just think of cost in terms of money. Cost can also be your time, stress, not doing something else (also known as opportunity cost). Lifehacker says, “More often than not, figuring out something’s cost is more important than figuring out its price.”

Here are a few examples:

You buy a dog that costs $500. The $500 price tag is a one-time expense, what it takes to buy-in. The cost, however is: dog food + doctor visits + dog-sitters + 15-minute walks each day over years, many years. The cost is on-going and can be more than 10 times the price.

You buy a luxury handbag that costs $500. The price tag is the same as the example above; however, the cost, in this case is nominal – maybe you need to clean it, have a few repairs, etc. but not very much in the grand scheme of things. The cost of the luxury handbag is less than the price.

Here’s the thing: as I am typing this post I am learning / acknowledging my own personal buying behavior and preference. I prefer high price, low-cost items. 💡 Meaning, I’d rather spend money up front (higher price) and have minimal cost. Some people prefer the opposite approach. Or maybe more correctly stated, our attitudes are different depending on what the “thing” in question is: a house, a trip to Paris, a steak dinner, a vintage car, a membership in a club or group, golf lessons. I do think most people have a pattern. Sure, you can bring value into this discussion but that’s subjective. Cost and price are quantifiable, very easy to measure.

So what’s the takeaway? The next time you consider the pice tag (“buying in”), take 30-seconds and think about what type of price-cost arrangement you are getting yourself into. Whatever your choice is, enjoy!

A rapper by the name Killer Mike (also an avid Bernie Sanders supporter) made a call to action on a 107.9, a popular Atlanta radio station last week. He said,

We cannot go out in the street and start bombing, shooting and killing,” the rapper said during the town hall. “I encourage none of us to engage in acts of violence that will cause more peril to our community and others that look like us. I encourage us to take our warfare to financial institutions.

The result? EIGHT THOUSAND 8,000 PEOPLE OPENED ACCOUNTS AT CITIZENS TRUST BANK IN ATLANTA. That figure was reported last week by USA Today and many mainstream news outlets. Similar results were reported in Houston at Unity National Bank, the only black-owned bank in the state of Texas and at OneUnited Bank, with locations in Los Angeles, Miami and Boston. Think you’ll see this on the news?? Don’t hold your breath! Need to finad a black owned bak or credit union near, you, check out this list on Facebook and be sure to follow the conversation on Twitter, #BankBlackBankSmallBankLocal

Now THIS is a movement! #startsomewhere #dosomething #anything #getmad #divertmoneyawayfromthesystem 🙌🏽

This is a super random post about meat and health – charge it to me almost recovering from a sinus infection/cold… things still aren’t quite working the way they should.

I am super picky about where I buy meats: chicken, fish, beef, pork, etc. While some people think Whole Foods is a rip-off, I absolutely do not want to buy my meat from any other place. Trust me, I’ve tried being more “cost conscience” by shopping at “normal” grocery stores like Kroger, Publix, Target and Wal-Mart. In the end, I always regret my decision which manifests at the exact moment I’m ready to cook – too much fat or a bad cut of meat always disguised by clever packaging. I do not like fat on my meat, any meat! And frozen meats/meals? Forget it! If I’m cooking, 95% of the time there will be no processed foods, especially meat!

The International Agency for Research on Cancer (IARC) has classified processed meat as a carcinogen, something that causes cancer.

Processed meat includes hot dogs (never), ham (only from the Honey Baked store at Thanksgiving & Christmas), bacon (sometimes), sausage (very very rarely, it’s never been my preference), and some deli meats (never). It refers to meat that has been treated in some way to preserve or flavor it. Processes include salting, curing, fermenting, and smoking. Red meat includes beef (filets only! clean cuts with trimmed/no fat), pork (probably too much, love pulled pork!), lamb (gag), and goat (double gag). (American Cancer Society). You can also check this BBC news article for more information on this. It’s a proven fact.

Being sick always makes you re-evaluate your health. Let’s be honest: being sick sucks and all you think about is how you’re going to change your life (style) once you get well so you don’t get sick again. It’s an inconvenience and often can be painful. When you’re sick you have plenty of time to explore this concept in your mind and on the Internet. #guilty Out of sickenss comes the realization that we need to take better care of ourselves and it starts with food which can bemedicine or poison. While I was sick I actually bought a book, It Starts with Food. Yes, this actually happened! There’s also a super amazing podcast by The Minimalists, Health (link) that I listen to it frequently. Yes, I know you can’t control all variables; but, we have to start somewhere! And sometimes over and over again.

When I purchase meats at Whole Foods I can see exactly what I am buying. I see the cut and I know the quality. Sure, it costs a bit more (Whole Foods is often known as Whole Paycheck); but, every time I make a purchase I have zero regrets and I get to enjoy and quality healthy meal. You know what they say about health: pay now or pay later! I’d rather not take that risk. Here is Whole Food’s policy on meat quality standards:

Animals must not receive antibiotics, ever.

No animal by-products are allowed in feed, including feather meal or rendered fat.

Animals raised for meat must not receive added hormones. (Federal regulations prohibit the use of hormones when raising pigs, poultry, bison, goats, or rabbits.

For ruminants, time in a feedlot cannot be more than one-third of the animal’s life.

No crates, cages or tethers are permitted. This includes, but is not limited to: